The EURUSD has been trending to the downside this wee. Recall from Monday trade, the high price extended above Friday’s high but not Wednesday’s high. It did move above the double top going back to August 23 and August 26 (see red numbered circles and topside yellow area).
Since then the price has been stepping lower each day. Admittedly the big steps were on Monday and Tuesday. Yesterday and today are also lower but with less downside momentum.
Today’s low reached 1.10076 and bounced. That low took the price into a lower extreme swing area between 1.1001 and 1.10145.
The subsequent bounce has taken the price back above a swing area near 1.10258. In the late Asian/early European session the price bottom near that level and bounced higher toward the 38.2% retracement of the move up from the August 1, 2024 low (not shown)What next?
If the price can stay above the 1.1025 level, that may build upside momentum back toward the 38.2% retracement of the move up from the August 1 low). Get above that 38.2% retracement and traders may start to talk more about the rebound off of the floor near the 1.1000 level.
Conversely, a move back below the 1.1025 level with momentum, would have the bears jumping on for another test of the key 1.10000 level
This article was written by Greg Michalowski at www.forexlive.com. Source